Machinery purchased for $63,000 by Sweet Co. in 2013 was originally estimated to

Question

Machinery purchased for $63,000 by Sweet Co. in 2013 was originally estimated to have a life of 8 years with a salvage value of $4,200 at the end of that time. Depreciation has been entered for 5 years on this basis. In 2018, it is determined that the total estimated life should be 10 years with a salvage value of $4,725 at the end of that time. Assume straight-line depreciation.

(a)

Account Titles and Explanation

Debit

Credit

Machinery purchased for $63,000 by Sweet Co. in 2013 was originally estimated to have a life of 8 years with a salvage value of $4,200 at the end of that time. Depreciation has been entered for 5 years on this basis. In 2018, it is determined that the total estimated life should be 10 years with a salvage value of $4,725 at the end of that time. Assume straight-line depreciation.

It is saying that Deprecitation expense 4,305, accumulated depreciation 4,305 is in correct? please help

Explanation / Answer

Dear Student Thank you for using Chegg Please find below the answer Statementshowing Computations Paticulars Amount Cost of machinery                 63,000.00 Life in years                            8.00 Salvage Value                   4,200.00 Depreciation per year = (63000 -4200)/8                   7,350.00 Depreciation for 5 Years = 7350*5                 36,750.00 Carrying value at beginning of 2018 = 63000 - 36750                 26,250.00 Remaining life = 10 - 5                            5.00 Salvage Value                   4,725.00 Depreciation per year = (26250 - 4725)/5                   4,305.00 Entry would be Dr Cr Depreciation expense dr                   4,305.00 to Accumulated depreciation                   4,305.00

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